Natural gas from Russia and Turkmenistan to impact LNG demand on the Chinese market

Natural gas from Russia and Turkmenistan to impact LNG demand on the Chinese market

China plans to develop projects for import of LNG (liquefied natural gas) more active than other countries, however, a slowdown in gas demand in general may blow some of these projects, Catriona Scott, Senior Energy Analyst, Global Gas Analytics, says.

Chinese gas demand is expected to surge on a fast-growing economy and environmental concerns. China’s policy directives are encouraging coal-to-gas switching to combat air pollution and are set to continue driving up the share of natural gas in the country’s energy mix and domestic consumption of the fuel. Over the past 17 years, Chinese annual gas demand has increased 15 times – from 15.8 Bcm in 2000 to 240.4 Bcm in 2017.

In 2018, China imported about 91 million tons of gas, including 54 million tons of LNG accounting for 60 percent of the total gas import. In 2018, LNG imports raised 41 percent after boost of 46 percent in 2017. China’s natural gas demand is set to grow by 10 percent in 2019 – up to about 100 million tons.

Experts forecast that in the future a decrease of LNG imports to the Celestial Empire and an increase in natural gas imported by pipelines due to deliveries from Turkmenistan and also from Russia are expected. As expected, it is the export of pipeline gas from Russia, which would start at the end of December this year, and from Turkmenistan, could impact the LNG demand on the Chinese gas market.

Chinese economic growth has been powered by country’s ongoing policy to push households and industry to environmentally friendly energy policy and to switch from coal to natural gas for heating, experts say.

Climate change has not been a direct driver of the rising gas demand, but the moving from coal to gas helped reduce the energy consumption of the economy. In this regard, experts note, “the increased natural gas imports in facing the poor air quality and climate change issues could play an even bigger role in boosting gas demand looking forward in China.”

Nury AMANOV